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Garage Keeper Lien for Facilities/Mechanics

Agency: State

What is a Garage Keeper Lien (GKL)?

A garage keeper who has a Michigan repair facility registration is entitled to compensation for proper charges due after storing, diagnostics, repair estimates or servicing a vehicle at the request of the registered owner. If the vehicle owner does not pay the charges due, the garage keeper can detain the vehicle and file for a garage keeper's lien. When properly filed with the Michigan Department of State, the garage keeper's lien has priority over all other liens.

NOTE: This process cannot be used for mobile homes. A court order or surety bond is required.

To Apply for a GKL a Repair Facility:

Must be in possession of the vehicle;

Must be a licensed facility at the time of repairs; License and Repair Facility number can be obtained through the Bureau of Driver and Vehicle Programs;

Must have actually performed repairs or diagnostics requested by vehicle owner;

Must submit a formal storage agreement signed by the vehicle owner if requesting a lien placement as a result of payment default for storage;

Applying for a Garage Keeper Lien

The garage keeper must be in possession of the vehicle. The garage keeper may not detain the vehicle for more than 225 days after performing the last labor or furnishing the last supplies for which a lien is claimed against the vehicle. A garage keeper will not be able to sell the vehicle under the garage keeper's lien act if the sale is not within the 225-day limit. Therefore, carefully follow the procedures below to avoid unnecessary delays in the process.

This office can also provide the application by mail. Applications must be submitted within 105 days after the lien attaches.

If the application is complete, a Garage Keeper's Lien (GKL) case number will be assigned and the Secretary of State will mail a TR-42 Certificate of Foreclosure of Garage Keeper's Lien and Bill of Sale to you. You will be notified if your application is not complete. Corrections must be made and a complete application submitted within 105 days after the lien attaches.

The TR-42 will have an issue date and list all recorded owners and lienholders. Within 30 days after the issue date the garage keeper must send a certified letter, return receipt requested, to all owners, lienholders, and the Bureau of Driver and Vehicle Programs. The letter must contain the following:

a) Notice of claim of lien against the vehicle;
b) Vehicle identification number (VIN);
c) Vehicle description (year, make and body style);
d) Copy of the itemized statement of account, including any storage fees;
e) Time limit (30 days or more after postmarked date of letter) for the owner to pay the bill;
f) Statement that all lienholders are being notified of the garage keeper's lien and have the right to take possession of the vehicle after paying the amount due;
g) The date, time, manner, and place of vehicle sale (at least 75 days after the TR-42 issue date).

On the TR-42 Certificate of Foreclosure fill in the dates the repairs were completed and the date the certified letters were mailed. Retain the mail receipts for your records. Retain the TR-42 until the sale is complete.

Sell the vehicle at the time, date, manner, and place specified in the certified letter described in number 4 above.

After the sale complete the remainder of the TR-42 form and give to the vehicle buyer.

The buyer must take the completed TR-42 to a Secretary of State branch office and apply for a title. Title fee and tax are paid at that time at the branch office.

b) Cost of sale to garage keeper
c) Any prior lienholder who gave notice to the garage keeper
d) Other reasonable charges of the garage keeper
e) The owner listed on the TR-42

A garage keeper may have a lien for storage (up to $10 per day unless otherwise agreed to in writing). Storage charges shall not exceed 120 days unless otherwise agreed to in writing. Storage charges may be in addition to the maximum lien determined in Section 3(4) of the Garage Keepers Lien Act (enclosed). Lienholders are not responsible for any storage charges that accrue until 45 days following the date of the letter from item number 4 above.

If no one purchases the vehicle at the public sale, the garage keeper may purchase the vehicle. In this case, the garage keeper lien is terminated. The garage keeper must take the completed TR-42 to a Secretary of State branch office and apply for a title.

If the owner or lienholder pays for the vehicle charges before the sale, fill in the box at the bottom of the TR-42 and return the form to the address below. If the lienholder claims the vehicle and intends to apply for a repossession title, give the completed TR-42 to them.